Financing & LoansQuestion 19
What Is Seller Financing and How to Find It in Houston?
Seller financing is when the property owner acts as the bank, letting you make payments directly to them instead of getting a traditional mortgage.
Seller financing can be a powerful tool in Houston, especially for investors who don't qualify for traditional loans or want creative deal structures.
- How it works: The seller holds a note and you make monthly payments directly to them. Terms are fully negotiable — down payment, rate, term, balloon payment.
- Where to find it: Tired landlords, inherited properties, FSBO listings, probate situations, and long-term owners with no mortgage.
- Typical terms: 5%–20% down, 6%–9% interest, 5–30 year amortization with a 3–7 year balloon.
- Houston tip: Target absentee owners in older Houston neighborhoods who own properties free and clear. Direct mail campaigns work well here.
Bottom Line
Seller financing won't fall in your lap — you need to proactively seek it. It's especially valuable in Houston for sub-to deals and when conventional financing limits have been reached.